AG Ferguson demands documents be disclosed in Eyman investigation

SEATTLE — Attorney General Bob Ferguson announced that he filed petitions today in Snohomish and Thurston County Superior Courts asking each court to enforce subpoenas issued in the state’s investigation of Tim Eyman, his political committees, his for-profit company, and a for-profit signature gathering company.

The petitions assert that Eyman and the other parties withheld documents subpoenaed in the course of the Attorney General’s investigation of alleged campaign-finance law violations.

On November 13, 2015, the Attorney General’s Office issued civil orders to Tim Eyman; his political committees, including Voters Want More Choices and Protect Your Right to Vote on Initiatives; his for-profit company, Tim Eyman Watchdog for Taxpayers; the for-profit company Citizen Solutions; and its principals, Roy Ruffino and William Agazarm.

The orders sought business and financial information, including banking and tax records, regarding Eyman initiative campaigns in Washington.

“Tim Eyman and Citizen Solutions refuse to cooperate with my investigation. I will not accept that,” Ferguson said.

The respondents began producing records on December 15, 2015. Over the following months, they produced a smattering of records, some of which were heavily censored (or “redacted”). Counsel for respondents — Mark Lamb of The North Creek Law Firm in Bothell — indicated that they would seek judicial protective orders for documents they claimed were privileged or subject to a privacy interest. Although the Attorney General’s Office agreed to potential hearing dates on the matter, respondents never filed requests for protective orders with the courts.

Among other information demands, the Attorney General subpoenaed bank statements from respondents covering 2009 to the present. Citizen Solutions produced just one, heavily redacted, monthly bank statement, and Voters Want More Choices produced only a few bank statements. The AGO also subpoenaed five years of tax returns, none of which have been produced. The AGO ordered the respondents to turn over years’ worth of communications between the parties, but respondents refused.

Noting that the AGO investigation “has been significantly hindered and essentially stalled by respondents’ refusal to provide the records,” the Attorney General’s petitions ask the Thurston and Snohomish County Superior Courts to issue orders compelling the respondents to produce the records required by the AG’s civil order or to appear before the court and explain why they should not be held in contempt. The AGO also requested fees and costs for having to file these petitions. The courts are expected to set hearings on the petitions in the near future.

Background on Investigation

In April 2012, the state Public Disclosure Commission received a complaint about Eyman and two of his political committees, Voters Want More Choices and Protect Your Right to Vote on Initiatives. The complaint alleged failures to register as political committees, failure to file timely reports on expenditures and contributions, and the use of funds raised in support of one initiative for a different initiative.

In September 2015, PDC staff presented the results of their investigation to the Commission. The investigation, which addressed conduct from 2012, discovered evidence of multiple apparent violations of state law, including:

$623,325 in payments by Voters Want More Choices to the signature gathering firm Citizen Solutions “incurred in a manner to effect concealment” because they were described in the committee’s reports as paying for signature gathering, when $308,185 was passed from Citizen Solutions to Eyman’s for-profit company, “Tim Eyman, Watchdog for Taxpayers” on July 11, 2012;

Eyman’s use of approximately $170,000 in contributions from Voters Want More Choices for personal living expenses;

The expenditure of about $200,000 contributed to support Initiative 1185 to fund signature gathering for a separate initiative, Initiative 517;

Concealment of Eyman as the source of $182,000 of in-kind contributions attributed in reports to Citizens in Charge, a Virginia-based company; and

Failure of Voters Want More Choices and Protect Your Right to Vote on Initiatives to file complete and accurate reports of contribution and expenditure activity.

More details on the investigation and the initial complaint are available in the PDC’s referral letter here.

The commission referred the results of its staff’s investigation to the Attorney General’s Office for appropriate legal action. The commission further noted that it “[was] extremely troubled that it appears that Mr. Eyman intended to hide from the public the sources of funds and the actual purposes for which expenditures were made, and to further conceal that funds were used by Mr. Eyman solely for his personal use.” The commission recommended that the Attorney General consider further investigation into this transaction practice for other years.

In November 2015, the Attorney General began an investigation into the allegations that Eyman, his political committees, his for-profit company and the signature gathering firm Citizen Solutions concealed other financial transactions for years beyond those covered by the PDC investigation, in violation of the state campaign finance disclosure laws. That investigation is ongoing.

-30-

The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.